inflation data just out, page-8

Unsinkable....


"...the fed doesnt really take into consideration the PPI as much as the CPI which is out tomorrow... if the CPI comes back as benign, then there is a very good chance that the fed will cut rates in september... imho, they have to cut rates now amongst all the subprime worries... and imho, they shouldnt have raised interest rates for the last 2 times, i believe they are a little bit impatient waiting for inflation to decrease...."



Personally I think that it would be unwise to cut interest rates over there....the last thing that the US needs is extra incentive for people to apply for credit, which a lowering of rates would bring.

I also think that it has been wise of the Fed to increase rates as they have....energy prices, more specifically oil, will only continue to trend upwards over time....and obviously the resulting flow-on effect from higher production costs due to oil's increasing scarcity, will continue to fuel inflationary pressures indefinately.

The Fed must remain steadfast and viligant....better to experience some short term pain now, rather than a world of hurt later.